SDG&E bid for stimulus funding is shot down

San Diego Gas & Electric Co.’s ambitious bid to get the federal stimulus funds for nearly half of a $213 million demonstration of “smart-grid” technology failed yesterday, but the company said it would regroup and move forward.

Energy Secretary Steven Chu said yesterday that 32 projects across the nation will get $620 million in federal grants designed to test the best way to use new technology to better run the electric grid.

“This funding will be used to show how smart-grid technologies can be applied to whole systems to promote energy savings for consumers, increase energy efficiency, and foster the growth of renewable energy sources like wind and solar power,” Chu said.

The biggest award, $88.8 million, went to the Battelle Memorial Institute in Richland, Wash., for a five-state, 60,000-customer grid to demonstrate communications between utilities and the people and institutions making and using electricity.

SDG&E asked for $100 million to pay for improvements it said would build on high-tech technology it is already installing, such as 1.4 million “smart meters” that can track electricity usage in 15-minute increments, rather than once a month.

Company officials are disappointed but not disheartened, said Lee Krevat, SDG&E’s smart-grid director.

“If we won, we’d be further ahead because we’d know how to fund this project we’re so excited about,” he said. “The priorities within that proposal will continue. ... We don’t feel like we’re back to Square One.”

Instead, the company will now cut the large proposal into pieces to determine the order in which it find funding, possibly asking for rate increases.

“What we’re going to do is prioritize them on benefits to the costumer versus the cost,” he said. “We want to make sure the grid can move forward as our customers want us to move forward.” That includes improving the ability to integrate big solar and wind farms, rooftop photovoltaic panels and plug-in cars into the grid, he said.

SDG&E had signed up a coalition of two-dozen companies, universities, government agencies and nonprofits, plus a union, in its application for the federal funds.

“They, like us, were disappointed,” Krevat said.

Just last week, SDG&E officials touted their efforts when utility leaders from around the world gathered in San Diego to talk about smart-grid issues.

The national competition for the federal funds handed out yesterday was stiff.

“There were a number of high-quality, technically attractive projects that we just weren’t able to fund,” she said.

She wouldn’t talk about why some projects got money and others didn’t, but said each application was looked at several times for technical, financial and job-creation prospects. In addition, the department sought to fund a variety of technologies and regions.

In addition to grants for a powerplant-to-customer smart grid, the Energy Department yesterday gave out money for a variety of energy storage projects. Storage is key to getting the most out of our electric system because, as less-predictable wind and solar power becomes more popular, it’s getting more difficult to match the production to use.